SABB beats forecasts despite Q2 net profit fall

RIYADH, July 8, 2015

Saudi British Bank (SABB), the kingdom's sixth-largest bank by assets, posted a 1.71 per cent drop in its second-quarter net profit, it said in a bourse statement on Wednesday, beating analysts' forecasts.

The bank, an affiliate of HSBC Holdings, said it made SR1.14 billion ($304 million) in the three months ending June 30, compared with SR1.16 billion in the same period a year earlier.

Five analysts surveyed by Reuters expected the bank to post an average net profit of SR1.15 billion for the quarter.

The bank attributed its drop in net profit to a rise in total operating expenses, without elaborating.

Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later.

Total operating income for the quarter rose by 0.67 per cent on the corresponding period of 2014 to SR1.67 billion, while profits from special commissions increased 5.79 per cent over the same timeframe to SR1.07 billion.

Commenting on the results, the chairman Sheikh Khaled Olayan, said: "SABB has continued its focus on revenue growth and income diversification opportunities. With a strong capital base and liquidity position, we are well positioned to pursue new opportunities and enhance shareholder value in line with our strategic objectives."

"Within a changing regulatory landscape, strong governance and risk management remains a key focus for SABB, ensuring that business growth is in line with our risk strategies," he added.

SABB in May completed a private placement of a 10-year, SR1.5 billion subordinated Tier 2 sukuk callable in five years.

Saudi Arabian banks have been topping up their capital reserves in the last couple of years after a period of strong lending growth, through issuance of capital-boosting bonds and bonus shares.-Reuters and TradeArabia News Service